Sale-Release of Collateral

Lender’s actions must at all times be prudent, lawful and commercially reasonable, and consistent with the lenders practice on its non-SBA loans.

For all servicing/liquidation actions not requiring SBA's prior written consent, Lenders must document the justifications for their decisions and retain these and supporting documents in their file for future SBA review to determine if the actions taken by the Lender were prudent, commercially reasonable, and complied with all Loan Program Requirements.

Such documentation will be crucial to SBA’s review of the lender’s handling of a loan that the lender has submitted for guaranty purchase and to SBA’s determination as to whether the lender’s actions were prudent and commercial reasonable.

This same documentation and justification is also crucial to facilitate the comprehensive SBA review of liquidation wrap-up reports which Lenders must submit to SBA at the completion of liquidation.